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Full text of "A History of the Personal Computer"

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Chapter 10 Apple Computer in the 1980's 

1980, Apple Computer had distinct characteristics, 
had developed in the Apple II and the related ( 

it to make the transition from hobbyist or techn: 

innovations and the release of VisiCalc spreads] 



visit to the Xerox Palo Alto Research 
1979 changed the course of product 
The new PARC human interface concepts 
suited the vision of Apple. It continued the innovative 
initiatives of Wozniak. The development of the Lisa 
computer and the Macintosh computer that would be the 
future of Apple in the 1930's. 

10.1 ... Corporate & Other Activities 

Public Stock Offering 

The initial founders Jobs, Wozniak, Markkula, Holt 
and the venture capitalists who provided the financing 
had a tight control of the Apple Computer shares. 
Markkula also kept a firm control on the later sale and 
award of Apple shares. Initial shares went through 
several splits that significantly increased their value. 
A share distributed before April 1979 was the equivalent 
of t j".i rty-tw-:- shares on the day that Apple went public. 

During 1980 the market for new stock issues had 
improved. In August 1980 the Apple Computer board of 
directors decided to make a public offering of shares in 
the company. Apple selected two firms who offered 4.6 
million shares of common stock for sale in December 
1980. It was a huge success and oversubscribed. On the 
first day the offered share price of 522 increased to 
529. At the end of December 1980 Jobs' ownership in the 



10/2 Part III 1980's -- The IBM /Macintosh era 

company was worth about $256 million, Markkula's $239 
million, Wozniak's $136 million and Holt's $67 million. 

1980/82 Activities 

The company introduced Apple FORTRAN in January 

1980, then they announced the Apple III computer in May 
(see Section 10.2). In August at a company board meeting 
the board members decided to implement a new company 

functional one to a product-oriented one. The company 

created Divisions for the Apple II and Apple III, Lisa, 

In February 1981 Wozniak crashed his airplane on 

take-off from a local airport. Wozniak had serious 
injuries and for a period of time suffered from amnesia 
and lapses of conscious-ess. By early 1b81 the employee 
count had grown rapidly to nearly 2,000. An adjustment 
required just over 40 employees being terminated in 
February. The Terminations, and the way Mirie Scott 
handled them, had a bad effect on employee morale. 
Employees described the layoff as "Black Wednesday." A 
number of activities were converging to undermine the 
effectiveness of Apple's president Mike Scott. He was 
experiencing potentially serious health problems with an 
eye infection. Also he had not impressed management with 
the poorly handled layoffs. After an executive meeting 
in March, Markkula requested Scott's resignation and 
assumed the presidency of the company. 

With release of the IBM PC computer in August 

1981, Apple made an interesting competitive response. 
Adve _t isement s in a number of national newspaper 
published an open letter to IBM. It stated "Welcome, 
IBM. Seriously. Welcome to the most exciting and 
important marketplace . . ." Jobs received a personal 
reply from John Opel, the president of IBM thanking him 

Jobs appeared on the cover of Time magazine in 
February 1982 with the caption "Striking it Rich — 
America's Risk Takers." Lire magazine also featured him 
a month later. Jobs appeared again in the January 1983 



Apple Computer in the 19B0's 10/3 

computer as the "Machine of the Year." The article was 
not complimentary of Jobs, but he was becoming a 
national personality. 

In May 1982, Apple sued Franklin Computer 
Corporation for patent and copyright infringement. 
Wozniak, who had been playing a less significant role 
within the company, decided to return to college and 
complete his bachelor's degree. Wozniak also arranged 
and financed a "US Festival" of rock music in September 
and a second one in 1983. It was during 1982 that Apple, 
at Jobs' initiative, began the process of giving Apple 
computers to academic institutions and prisons. In 
November 19 82 Apple held its first Apple Fes t in San 
Francisco, California. Then in December, Apple became 
the first personal computer company to reach a rate of 
one billion dollars in annual sales. 

The company started a project in 1982 called the 
Apple IIx using an early version of the Western Design 
Center 55815 microprocessor. The engineering manager was 
Dan Hillman with some assistance from Wozniak in 1983. 
However availability and reliability problems with the 

other Apple products resulted in the project 



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10/4 Part III 1980 : s -- The IBM M.i, uito.l) e 



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Figurf 
tograph is 



: John C. Sculley. 

sy of Apple Computer, Inc 



John Sculley had a bachelor's degree from Brown 
University and an MBA from the University of 
Pennsylvania Wharton School. Sculley joined Pepsi-Cola 
in 1967 and became president of the company in 1977. 
Markkula offered Sculley $1 million to join Apple, $1 
million in annual pay and options for 350,000 shares of 
Apple stock in the spring of 1983. In addition he 

and SI million in severance if he did not work out. 
Within a few months the stock options would be worth 
over 9 million dollars. Jobs had made a pointed comment 
to Sculley when he said "Do you want to spend the rest 
of your life selling sugared water, or do you want a 
chance to change the world?" Sculley accepted the offer 



Apple Computer in the 1980's 



Oilier Activities between 19S3 and 19S9 

The company announced the Apple lie and Lisa 
computers in January 1983 (see Sections 10.3 and 10.4 
respectively). The publicity described the computers as 
"evolution and revolution." Bill Atkinson and Rich Page 
became Apple Fellows in February. Then Apple Computer 
entered The Fortur.e "'.agazine top 500 companies at jvumoa:/ 
411 in May and built the one millionth Apple II in June. 
It was the first computer awarded in a program called 
"Kids Can't Kait," That provided computers to about 
9,000 schools in California. Apple introduced the ProDOS 
operating system in June and an integrated software 
package oalleo Apple 1 /?:' _" !::;: i- Novembe i" . The company then 
introduced the Apple III Plus computer and the 
ImageWriter dot-matrix printer in December. Apple sales 
had surpassed one billion dollars annual rate by 
December. However competition from companies such as IBM 
had reduced profits. An industry wide recession had 
started that resulted in significant staff reductions. 
Sculley then decided to reorganize the company into two 
operational groups; the Apple II and Apple 32 that 
integrated the Lisa and Maci-tosr. product lines. 

The company announced the Lisa 2 (see Section 
10.4) and the Macintosh (see Section 10.5) computers in 
January 1984 . The company also released the ProDOS 
operating system f ■: i' Apoie II coraoutr i" s a:\o is ached a:\ 
out-of-court settlement of their patent infringement 
suit with Franklin Computer Corporation in January. Then 
Apple introduced the Apple lie computer (see Section 
10.3) and discontinued development of the Apple III 
product line in April. Alan Kay who had been a principal 
at Xerox PARC and chief scientist at Atari, became an 
Apple Fellow in May. Apple introduced the DuoDisk for 
the Apple II computer in June for $795, that was 
essentially two 5.25-inch Disk II drives in a single 

Apple Writer 2 . was released in September. During the 

year the company investigated strategic alliances with 

companies such as AT&T, General Electric, General Motors 



10/« Part III 1980's -- The IBM /Macintosh era 

to increase company penetration in the office systems 
market. Sales boomed until September, and by November 
Apple had sold two millicn .Apple II compute r s . Howeveu 
during the last three months of 19B4 an industry wide 
recession lowered Apple II, Lisa and Macintosh sales 
significantly below marketing forecasts. 

In 1984, Andy Hertzfeld who had worked on the 
development of software for the Macintosh computer, left 
Apple Computer and cieve lopec. a program called Swiccher. 
The program was developed to compete with integrated 

applications that could be running simultaneously. 
Hertzfeld sold the program to Apple Computer who 

supplied it free with the Macintosh computer. 

Apple introduced the Macintosh Office software and 

56,999 in January 1985. The printer used a Motorola 
MC68020 microprocessor and the Adobe PostScript page 
description language (PDL) . The Macintosh Office 
featured the AppleTalk Personal Network software that 
allowed a group of Macintosh computers to communicate 
and be connected to a LaserWriter printer. Unfortunately 
some key elements of the Macintosh Office software such 
as the File Server for sharing information were not 
ready. Wozniak left Apple in February and started a new 
company called CL-9 (Cloud-Nine) to develop remote 
control products for the home . Apple enhanced the Apple 
lie computers in March and terminate-:; production of the 
Lisa computer in April. Different versions of a 3.5-inch 
UniDisk drive with a capacity of 800K bytes were 
released in 1985 for the Apple II computers. 

As sales deteriorated, the relationship between 
Jobs and Sculley also deteriorated. In the spring of 
1985 they contested in a somewhat acrimonious manner for 
the leadership of the company. This executive 

Sculley as CEO of the company to make organizational 
changes. After securing the support of the board members 
in April, he persuaded them to relieve Jobs of any 
operational role in the company. In May the product 



Apple Computer in the 1980's 10/7 

and Sculley adjusted in 1983, changed back to a 
functional one. Personnel changes included: Del Yocam, 

Jean-Louise Gassee, would be in charge of product 
development; Deborah A. Coleman, world-wide 

manufacturing; and Michael H. Spindler, all 

three manufacturing plants and laid off 1,200 employees. 
Finally Apple declared its first quarterly loss. 

Another problem f-:-r Asple Computet: was a Lack ■:■ f 
application software for the Macintosh computer. This 
resulted in a campaign to encourage software companies 
to develop application programs for the Macintosh. Guy 
Kawasaki who had joined Apple in 1983 and Mike Eoich 
became "software evangelists," that promoted the new 
campaign. A significant application program for the 
Macintosh, would be the desktop publishing program 
called PageMaker . 

Jobs resigned in September and started a new 
company called NeXT Computer, Inc. However when five key 
personnel joined NeXT, Apple started litigation to stop 
Jobs and NeXT Computer from using any of its proprietary 
technology. 

Work was started in 1984 to develop an online 
worldwide network to support the company's dealers. This 
evolved into a Macintosh system called AppleLink that 
went online in July 1985. The system was maintained and 
operated as a joint effort between Apple Computer and 
General Electric. It featured easy-to-use graphics, 

LaserWriter Plus in January 1986. Sculley became 
chairman of the company and Apple reached an out-of- 
court settlement in the litigation with Steve Jobs in 
January. By February, Jobs had sold his holdings of 

Markkula now became the largest shareholder. Wozniak 
graduated from the University of California at Berkeley 
in June. The company announced the Apple IIGS computer 
and the enhanced Apple lie in September (see Section 
10.3) . 



10/8 Part III 1980's -- The IBM /Macintosh era 

Apple introduced the Macintosh SE and Macintosh II 

(see Section 10.5) in March 1987. Then in April, the 

company decided ;i ctest? an ir.dep^Vjde:". t v,\".olly cvnecl 
subsidiary called the Claris Corporation, to take over 
sales Fi-d marketing of Apple application software. Apple 
also introduced the MultiFinder operating system 
software and the HyperCard software for the Macintosh 
computer at the Macworld trade show in Boston in August. 

After helping to create the latest versions of the 
Macintosh computer, Steve Sakoman became head of a new 
research project in 1987 . Sakoman wanted to create a 
radically different personal information device he named 
Newton. It would be oen-oaseo , u = e hanclwi" it i-g 

prototype slatelike device had been developed that 
measured 8.5 by 11 inches. However, the estimated cost 

had grown from an early target of 52, 500 to between 
56, 000 and 58, 000 and Sakoman was having problems with 
corporate support. 

Bill Atkinson developed the HyperCard system 
software and the HyperTalk programming language in 
August 1987. This personal software toolkit provided a 
capability to organize a body of information and then 

could be text, graphics, video, animation or sound. 

In March 1988, Apple started litigation against 
Microsoft. Apple claimed for infringement of the 
Macintosh graphics in a new release of MS Windows 
Version 2.0 3 software. The suit also named Hewlett- 
Packard and it's NewWave software in the litigation. 
Apple introduced the Apple lie Plus and the Macintosh 
IIx (see Section 10.5) computers in September. The 
Macintosh IIx was the first Apple computer to use the 
Motorola MC68030 microprocessor and 68882 math 
coprocessor. Claris released AppleWorks GS for the Apple 
IIGS computer in October. 

In July 1989 a judgment in the litigation with 
Microsoft, significantly reduced Apple Computer's 

claims . Apple announced the Macintosh Portable and the 
Macintosh Ilci in September 1989 (see Section 10.5). The 
Macintosh Ilci was a high performance version of the 
Macintosh Ilex. In 1989 Xerox filed a lawsuit against 



Apple Computer in the 1980's 10/9 

Apple, stating it had infringed on the PARC copyrights . 

1990 . 

Following the company reorganization in 1985 and 
the introduction of Macintosh products with more memory 
and hard disk storage, the fiscal condition at Apple 
started to improve. Although corporate management 
problems continued. Areas such as executive direction 
and software development oould have been improve-:;. A 
tug-of-war between profit margin and an open or licensed 
product architecture to increase the Macintosh market 

reaching effects. These years were a turning point for 
the company. The open architecture of the IBM Personal 
Computer and all its clones, resulted in a massive 
market support in both hardware and software development 
that would be detrimental to Apple's future leadership 
in the industry. However, sales and profits continued to 
improve. In the 1989 annual report, the net sales were 
5.3 billion dollars and the total number of employees 
14,517. An impressive growth compared to 1979. John 
Sculley as chairman, president and chief executive 
officer had made significant achievements since his 
arrival in 1983. However the past was history, as he 

decade, we see a time of enormous opportunity for Apple 
Computer . " 



10.2 ... Apple III 



_he Apple __I com;: .:te _" hex', a ::li f f ioult gestation 
from its start in 1978 as the Sara project. A 
requirement to be able to run Apple II software, limited 
the microprocessor selection and created difficulties 
with the design. Wendell Sander was the chief hardware 
designer. Jobs was involved initially with the product 
design and affected i~ r - oomplet ion ocheorule wi~h 
numerous demands. Apple set a constricted target date 
and problems developed around the time Jobs got 
interested in the Lisa technology. Planning required 
Apple III development within ten months. It was to be a 



10/10 Paitm 1980's~ The IBM/Macintosh era 

off in Apple II sales and the introduction of Lisa. The 
company targeted the Apple III at the small business 

owner and for professional-managerial users. Apple 
announced the computer at the National Computer 
Conference in Anaheim, California in May 1980 and 
started shipping them in the fall of 1980. 




Figure 10.2: Apple III computer. 
Photograph is courtesy of Apple Computer, Inc. 

The computer used a Synertek 6502A microprocessor 

with 96K bytes of memory, expandable to 128K. The unit 
included one built-in 5. 2 5- inch, 143K byte floppy-disk 
drive and the terminal could display 2 4 lines of 8 0- 
column text. 

(Sophisticated Operating System! , built-in Apple 

Business BASIC and Pascal programming languages . An 



Apple Computer in the 1980's 10/11 

Apple II emulation mode enabled some Apple II software 
to run en The computer. Jeffrey S. Raikes was a 
principal in the development of the Apple III software. 

The company sold Apple III ccmpucers a:;: systems. A 
computer system, with a bl a::\-:-ane.-white monitor, a- 3':- 
column thermal dot-matrix printer and the VisiCalc III 
spreadsheet program sold for 54,500. 

The company released a 5 megabyte hard disk called 
ProFile for use with the system in September 1981. The 

incorporated had a detrimental effect on the quality of 
the computer. A number of problems required a redesign 
of the computer then re-introduction in December. Apple 
allowed early customers to exchange their old computer 
for a new one . The company introduced the Apple III Plus 
with 25eK bytes cf memory, other improvement =j a^\6. a 
price of 52, 995 in December 1983 . However after the 
introduction of the Macintosh and Lisa 2, the company 
discontinued the product line in April 1984. The initial 
poor quality resulted in only sixty-five thousand Apple 
Ill's being sold in the three years after its 
introduction. The resources committed to the release and 
problems with the Apple III during 1980/81, inhibited 
enhancements to the Apple II product line. 

10.3... Apple IPs 

Apple lie 

During 1981 the Apple II computer group started 
working on an upgrade that became the Apple lie. The "e" 
represented enhanced. Apple intended this upgrade to 
extend the life of the Apple II. Peter Quinn was the 
chief engineer and Walt Broedner a principal in the 
development of the new design. Apple retained the 
enclosure style of the Apple II computer but completely 
redesigned the interior. The new design significantly 
reduced the number of integrated circuit chips. Two 
custom MOS chips and 64K bit memory chips contributed to 
this reduction. The company announced the Apple lie with 
the Lisa computer in January 1983. 



10/12 Paitm 1980's~ The IBM/Macintosh era 

The computer used a MOS 65 02A microprocessor with 

64K bytes of RAM, expandable to 128K. The storage system 
supported six 140K byte 5.25-inch floppy disk drives and 
the terminal could display 24 lines of 40-column text in 
both uppercase and lowercase characters. The unit had a 
new 63-key keyboard adapted from the Apple III computer. 

The programs in the 1 6K of ROM were the Applesoft 
BASIC interpreter, system monitor routine, BO-column 
display firmware and self-test routines. The company 
also released the Apple Writer lie word processor and 
QuickFile lie data base application programs. The 
majority of Apple II and Apple II Plus programs and 
peripheral cards were compatible with the Apple lie. 

The base list price for a standard unit was 
51,395. A typical system with a single Apple Disk II 
drive and controller, 64K bytes of RAM, BO-column text 
card, and a monochrome monitor had a price of 51,995. An 
Apple Disk II drive and controller had a cost of 5545. 
The 80-column text card cost 5125 and the extended 
memory 8 0-column card that included an additional 64K 
bytes of memory cost 5295. 

Apple enhanced the Apple lie computers with four 
new high-performance chips in March 1985. The new chips 

monitor ROM chips and the 6502 with a 65C02 



additional update of the Apple lie occurred in January 
1987, that incorporated the Apple IIGS keyboard and 

Apple lie 

Apple introduced the Apple lie at an "Apple II 
Forever" conference in San Francisco, California in 
April 1984. The "c" stood for compact . Peter Quinn who 
was the chief engineer for the Apple lie, was also 
engineering manager of the lie design team. It was a 
portable computer that would be in competition with the 
IBM PCjr. The computer used additional custom integrated 



Apple Computer iu the 1980"s 10/13 

number of chips on the motherboard. Dimensions of the 
computer were 12 by 11.5 by 2.25 inches and the weight 
was 7.5 pounds. A German design company styled the 

bytes of RAM . The unit had one built-in half-height 
5. 2 5- inch 14 OK byte floppy disk drive and the monitor 
could display 24 lines of 40 or 80-column text. The 
computer was a closed-hardware architecture with no 
expansion slots and the power supply was an external 
unit. The housing integrated a 63-key keyboard that was 
functionally a duplicate of The Apple lie keyboai/d . 

printer called Scribe were released with the computer 
introduction. Also announced but not available at the 
introduction, was a flat-panel display that Apple 
intended to introduce by the end of 1984. 

Apple had updated the lie ROM software that 
contained the Applesoft BASIC interpreter and various 
routines. The computer used the new ProDOS operating 
system that provided for hierarchical directory 
structures. Most of the Apple II application programs 
were capable of running on the lie computer. The basic 
computer had a price of $1,295. 

Apple introduced an enhanced Apple lie in 
September 1986. Then they introduced a less expensive 
Apple lie Plus that incorporated a faster 4 MHz version 
of the 65C02 microprocessor, an internal 3.5-inch disk 
drive and a built-in power supply in September 1988 . The 
Apple lie Plus had a price of only $675 or $1,099 with a 



Apple IIGS 

The success of the Apple lie, the availability of 
a compatible 16-bit microprocessor and a new Mega II 

Apple IIGS. The "GS" stands for graphics and sound. The 
Apple IIGS computet evolved from the 1982/83 Apple IIx 
project. Principals in the engineering design were Dan 
Hillman, Harvey Lehtman, Rob Moore and Wozniak. The GS 

as Phoenix, Cortland and Rambo. Hillman and Jay Rickard 



10/14 Paitm 1980's~ The IBM/Macintosh era 

developed the Mega II as a cost reduction project, that 
resulted in the integration of most Apple II functions 
on a single chip. The new 16-bit computer incorporated 
enhanced graphics, advanced sound capabilities, expanded 
memory and an Apple II emulation mode . Apple introduced 
the Apple IIGS in September 1986. 

The computer used a Western Design Center W65C816 
microprocessor and 256K bytes of RAM, expandable to B 
megabytes. The storage system included support for both 
3.5-inch 800K byte and 5.25-inch 140K byte floppy disk 
drives. The terminal could display 24 lines of 40 or 80- 
column text. The keyboard was a separate unit with 80 
keys and a 14-key numeric keypad. The standard system 
included a mouse. Apple also introduced an optional 20 
megabyte hard disk designated 20SC for use with the 
computer. A computer system with a monochrome monitor 
and one 3.5-inch disk drive had a price of about 51,500. 

Apple provided a new operating system called 
ProDOS 16 for the 16-bit native mode and ProDOS 8 for 
the Apple lie emulation mode. ROM software included; the 
Applesoft BASIC interpreter, mouse based system 
utilities and a desktop environment with similarities to 
the Macintosh computer. QuickDraw II provided a set of 
graphic routines. Most of the existing Apple II software 
was compatible with the Apple IIGS. Apple released a new 
more powerful and flexible 16-bit operating system 
called GS/OS in September 1988. 

The company released an enhanced Apple IIGS in 
August 1989. The new computer had 256K bytes of ROM and 
1 megabyte of RAM. The ROM software included a number of 



William "Trip" Hawkins had developed a marketin 
plan describing the requirements for the Lisa compute 

by March 1980. Larry Tesler who had demonstrated th 
advance Xerox Alto computer systems to Apple in Decembe 
1979, joined the Lisa design team in July 1980 an 
became the manager of software development. Rich Pag- 
who was the chief hardware architect, had just complete 



Apple Computer iu the 1980"s 10/15 

a prototype of the Lisa computer incorporating a sample 
Motorola 68000 microprocessor. The Lisa name now denoted 
Local Integrated Software Architecture. 

Once again, as in the Apple III product, Jobs was 
affecting the design with numerous changes . This 
resulted in the departure of Ken Rothmueller and the 
appointment of Wayne Rosing as engineering manager. It 
also resulted in Mike Scott and Markkula advising Jobs 
in September that he would no longer be heading the Lisa 
project. In anticipation of the public stock offering 
and to placate Jobs they promoted him to chairman of the 
board. As part of a new corporate reorganization, John 
Couch became the general manager of the Lisa product 
group. 

Apple had integrated and extended the Xerox PARC 
(Palo Alto Research Center! graphical concepts in both 
the hardware and software. Bill Atkinson, Tesler and 
others developed the operating system and bit-mapped 

environment f-:-u the uss:. Ti":e Cv";:.:tr: wa =.: ie :=.: i :;ne::i :i 

windows concept, icons, a standard user program 

direct manipulation of screen objects by the mouse. 
Apple had achieved a new "state of the art" for personal 

computer software . 

However A;; pie was having p i" o b 1 e in s with the Twiggy 
floppy disk drive for Lisa. They decided to redesign the 
drive and have it produced by the Alps Electric Company, 
a Japanese manufacturer. Apple provided a preview of the 
Lisa computer to the Manhattan East Coast media then 
officially announced its introduction in January 198 3. 
However the late delivery of disk drives from Alps 
Electric delayed shipment of computers until May. 

The computer used a Motorola MC68000 

m i ■::■ coFi-C'ces 5: i with 1 megabyte :■ f F.?.M . The stcu age 
system had two Twiggy 5. 25-inch 860K byte floppy disk 
drives and a separate 5 megabyte Winchester-type hard 
disk named ProFile. The computer housing enclosed the 
12-inch monitor and two floppy disk drives. The keyboard 
was a separate unit and included a numeric key pad. The 



10/16 Part m 



- The IBM/Macintosh era 




Kin::l : w :-'an ;i :;e l , 
file and progracr 
pac kage . Apple 



roup developed the operating system, 

kDirav, 1 g rap:".ic.=j , Desktop Manager f-:-r 
ipulation and LisaGuide instruction 
;ed software and the MC68000 
microprocessor to generate the video display. The 
company also developed a suite of seven application 
programs called the Lisa Office System. LisaDraw 
provided drawing capability for lines, boxes, circles 
and other features with mouse control. LisaWrite was a 
what-you-see-is-what-you-get word processor developed by 
Tom Malloy, another Xerox PARC recruit. LisaCalc was a 
sophisticated spreadsheet program. LisaGraph was a 



Apple Computer in the 1980's 10/17 

program with searching, sorting and reporting 

capabilities. LisaProject was a PERT (Program Evaluation 

and Review Technique) program with capabilities for 
displaying Gantt and task charts. LisaTerminal was a 
communications program with emulation capabilities for 
the DEC VT52, DEC VT100 and Teletype ASR-33 terminals. 
AppleNet software was also available for connecting 
multiple Lisa installations. 

A Lisa system with one megabyte of RAM, two floppy 
disk drives, a ProFile hard disk and seven application 
programs sold for 59,995. A C.Itoh dot-matrix printer 
cost about $700 and a Qume letter quality printer was 
about $2,100. The company targeted the Lisa computers as 
office systems with pricing that excluded Apple's 
traditional personal user. Unfortunately at the Lisa 

computer. He stated that the Macintosh would cost $2,000 
compared to $10,000 for the Lisa. This and the lack of 
compatibility between the two computers would affect 
future sales of the Lisa computer. Apple unbundled the 
suite of software and reduced the Lisa price to $6, 995 
in September. 

Apple announced the Lisa 2 family of computers at 

the annual shareholders meeting in January 1984. The 
company changed the design and pricing to counteract 
marketing concerns related to the new Macintosh 

computer . 

Apple released three models for what they called 
the Apple 32 SuperMicro product line. Those three models 
were the Lisa 2, Lisa 2/5 and Lisa 2/10. Each of the 
models used the same Motorola MC68000 microprocessor as 
the Lisa and had 512K bytes of user memory. The number 
of floppy disk drives on each model changed from two 
5. 25-inch Twiggy's to a single 3. 5-inch Sony drive as 
used on the Macintosh. The Lisa 2 had no hard drive and 
sold for $3,495. The Lisa 2/5 had an external 5-megabyte 
ProFile hard drive and sold for $4,495. The Lisa 2/10 



10/18 Paitm 1980's-TheroM/Maciutosh era 

had an internal 10-megabyte hard drive and sold for 
55, 495. 

An operating system software package called 
MacWorks was available that enabled all three models to 
run Macintosh application programs. However one 
potential problem was that the Macintosh pixel display 
was square, whereas the Lisa pixel display was 
rectangular. The Lisa Office application programs 
required a model with a hard drive and a memory card to 
extend the memory to one megabyte. Apple also announced 
a new AppleBus for a small-scale local- are a network to 
connect peripherals. It also facilitated the transfer of 
files be:weer. the Li = a ar.cl MaciiiTcsti commute _" :;yi:^:'i. 

Conclusion 

Corp-i-rate America die; no: accept the Li.sa computer 

not compatible with either IBM or the Macintosh and the 
price was too high. Sales were significantly below 
marketing forecasts in 1984. Then in January 1985 Apple 
renamed the Lisa 2/10 computer Macintosh XL and reduced 
the price to 53,995. The XL denoted extra-large or ex- 
Lisa. Apple discontinued the other two Lisa models. This 
however did not result in any significant sales increase 
and Apple discontinued the computer in April 1985. 

10.5 ... Macintoshes 

Development and Release 

Under Jef Raskin's direction, Brian Howard and 
Burrell Smith had completed prototypes using the 
Motorola M6809E microprocessor. Raskin had also hired 
Guy "Bud" L. Tribble to develop the Macintosh software. 
In September 1980 the board considered cancellation of 
the project due to problems with the Apple III and Lisa 
computers. After Jobs' separation from the Lisa product 
development in September, he started looking at the low- 
cost Macintosh project. Jobs now questioned Raskin's 
selection in 1979 of the Motorola M680SE microprocessor 
with its limited capabilities. Jobs supported a proposal 
by Burrell Smith and Bud Tribble to change the 



Apple Computer ill the 1980's 10/19 

microprocessor to the Motorola MC68000 and had a new 
prototype constructed by December. The new design had 
many capabilities comparable to the Lisa, at 

significantly lower cost. Jobs perceived the Macintosh 
as being a suitable successor to the Apple II. 

Jobs became the Macintosh manager and was given 
authorization to change the Macintosh development from 
"project" to "product" status. The time frame for the 
new product development would be twelve months. In 
January 1981 Jobs increased the staff by moving key 
Apple II people to the Macintosh development group. 
Principals in tj-.e hardware development •.■.'ere B.rrell 
Smith and Rod Holt. In the software development the 
principals were Bud Tribble the software manager, Bill 
Atkinson, Andy Hertzfeld, Bruce Horn and Randy 
Wigginton. Industrial designers Jerry Manock and Terry 
Oyama designed the computer enclosure. Differences in 
management and technical issues developed between Jobs 

development group in 1981, and resigning from Apple 
Computer in March 1982. Jobs had also supported the 

removal of Mike Scott as president in March 1981 and was 
now in a stronger position to control the destiny of the 
Macintosh computer within the company. Apple established 
a target date of early 1982 to ship the new Macintosh. 

Jobs made a number of significant design decisions 
during 1981 . The "footprint" of the new computer would 
be no larger than a telephone directory to minimize the 
space occupied by the computer on a desktop. After 
various mockups of the case, Manock finalized the 
enclosure design by early summer. The enclosure 
integrated the monitor and floppy disk drive within the 
case . The unit had a detached keyboard. There would be 
no expansion slots; Apple decided that software would be 
the means to expand the capabilities of the computer. A 
set of software tools within ROM would facilitate 
program development and provide a consistency in the 
user interface. Apple had outside suppliers write most 
of the application programs. 

In the spring of 1981, Jobs visited Paul Allen and 
Bill Gates at Microsoft to discuss the requirements for 



10/20 Paitm 1980's-TheffiM/Maciutosh era 

Microsoft to supply a spreadsheet, a chart program and a 
BASIC interpreter for shipment with the Macintosh. At 
this time Microsoft was busy developing software for the 
new IBM E'er sons 1 Computer . However after visit i-g Apple 
and seeing a presentation of the Macintosh, they reached 
an agreement in January 1982 to provide the software 
requested by Jobs. Microsoft adapted the spreadsheet 
program from Multiplan, the charting program became 
MacGraph and work on the adaptation of a BASIC 
interpreter began. 

The executive management approved production of 
the Macintosh computer in December 1981 with shipment 
date targeted for October 1982. However in early 1982 
the introduction date of the Macintosh changed to May 
1983. Jobs decided to assemble the Macintosh computer 
using advanced robotic techniques in a highly automated 
factory. They would also utilize a cost-effective 
Japanese concept of "just-in-time" for delivery of 
production parts . 

The software manager, Bud Tritable left Apple in 
19 82 . Robert L. Belleville replaced him and became 
director of Macintosh engineering. Bill Atkinson, Steve 
Capps, Andy Hertzfeld, Bruce Horn and Larry Kenyon 
designed the operating system. Bill Atkinson had the 
experience of being a principal in the development of 
the Lisa operating system. Horn and Capps developed the 
Finder program for file and program control in the 
desktop envi i/onment . A di/awir.g p:0(jL" = iii named Mac ": : ketch 
that became MacPaint, and an interface program called 
Toolbox by Hertzfeld were also under development 
internally. Apple assigned Donn Denman to develop a 

BASIC programming language called MacBASIC. A potential 
marketing problem for the Macintosh and Lisa computers 
was developing. It was their lack of compatibility in 
operating systems, programs and data files. 

Jobs had arranged for Randy Wigginton to write a 
word processing program for the Macintosh, when he 
decided tc leave Ap;:-le . However Jsbs was determined to 
have Wigginton write the word processing program. In 
December 1981 Jobs offered Wigginton royalties up to $1 
million if he developed the software on-time for the 
Macintosh delivery date. Wigginton demonstrated his 



Apple Computer iu the 1980's 10/21 



:ei 


= sing program ir 


i early 1982. 


y.& 




had trouble 




text. The set 


:een display 




i the original 


256 by 2 56 



resolution had change 

pixels to 384 by 256 pixels and now for the new 
requirements to 512 horizontal by 3 42 vertical pixels. 
This allowed the lines to break on the screen at the 
same place they break on the printer, a What-You-See-Is- 
What-You-Get (WYSIWYG) system. 

Jobs was also having problems with the Macintosh 
name . Although Raskin had changed the spelling, Mcintosh 

their trademark. Apple subsequently made a payment to 
Mcintosh Laboratories to license the rights to use the 
Macintosh name. 

In January 1983, problems with the Twiggy floppy 
disk drive resulted i- the computer introduction date 
being moved to August . By the summer, Alps Electric was 
still having problems, Apple therefore decided to use a 
new 3.5-inch disk drive developed by Sony. The disk had 
a greater capacity and a more protective plastic case. 
However this resulted in the computer introduction date 
being delayed again. Apple announced the introduction to 
the public in a dramatic Orwellian commercial during the 
Super Bowl football game in January 1984. The official 
introduction was two days later on January 24th, at the 
annual shareholder's meeting. 

The computer used a Motorola MC68000 

microprocessor with 128K bytes of RAM. The storage 
system had one integral 3.5-inch 400K byte floppy disk 
drive from Sony. The disk controller used a single 
large-scale integrated chip called IWM (Integrated Woz 
Machine) . It was a one-chip integration of the disk 
controller functions as developed by Wozniak for the 
Apple Disk II drive. The display was a 9-inch monochrome 
monitor. The computer had a small 9.75 by 10.9 inch 
footprint and was 13.5 inches high with no expansion 
slots and a separate keyboard. The computer system 
utilized a single-button mouse similar to the Lisa 



10/22 Part III 



- The IBM/Mac iiitosh e 




Figure 10.4: Macintosh co-puter. 
raph is courtesy of Apple Computer 



The 64K of ROM contained; 

- program and a set of roi 
face Toolbox. The Toolbox 



ing 



the user interface. A QuickDraw graphics program 
eloped by Bill Atkinson was also in ROM. Two 
licat ion programs were available from Apple . The 
st was MacPaint, also created by Atkinson and the 
ond was the word processing program called MacWrite, 
tten by Randy Wigginton. Microsoft had also adapted 
spreadsheet program Multiplan and a Microsoft BASIC 



Apple Computer in the 1980"s 10/23 

for release in 1984 included; Pascal, 

Assembler/ Debugger, Logo, MacDraw, Mac Project , 

Mac 7^ :m::".cl and The Word processing prog c am . 

The price of the Macintosh was $2,495, an 
ImageWriter printer $595 and a second 3.5-inch disk 
drive $495. Prior to introduction Apple devised a unique 
marketing strategy to increase initial sales. They 
formed an Apple University Consortium (AUC) that offered 
the Macintosh to students and faculty for a flat $1,000. 

Mac i-to.=j:". to penetrate t'r.e siuca:ionsl marker. . 

noted two limitations that impeded the utilization of 
the Macintosh. One limitation was the storage system and 

the other was memory. Apple released a second 3.5-inch 

limitation was the lack of a hard drive. However the 

significant limitation was the 128K bytes of user 

graphics utilized a portion of the RAM memory. This 

reduced the memory available for application programs 

and files. It also resulted in a slowdown of program 

execution. Users were saying that the computer was a 



and a lack of application : 

price to $1,995. Then Apple 
TurboMac and released the "I 
RAM memory in September. 

1985, G< 



between Microsoft Windows so 
Lisa/Macintosh graphics. The agreement recognized that 
Microsoft had used derivatives of the Apple graphics am 
allowed their use in Microsoft Windows and othe: 

the license for Microsoft BASIC (Applesoft BASIC) on thi 
Apple II computer, Apple agreed to terminate thf 
completion of MacBASIC that Donn Denman had beei 
developing. Microsoft also agreed to upgrade the Won 



Apple lo 


wered tht 


developme: 


it of tht 


jith 512K 


bytes ot 


Sculley 


signed i 


the sir 


lilaritie: 


and t 


he Appl* 



10/24 Paitm 1980's~ The IBM/Macintosh era 

application program and delay the Excel spreadsheet fj 

the IBM Personal Computer. 

Macintosh Plus 

Apple announced the Macintosh Plus with 01 
megabyte of memory in January 1986. The computer had 
improved disk: drive with greater capacity, cursor ke" 

and a numeric key pad. The Macintosh Plus now includi 
provision for the connection of a hard disk drive . Tl 
computer had a price of $2,599. Apple also released tl 
LaserWriter Plus printer that had a price of $6,798. 



compute L s . 

Macintosh SE 

Apple introduced the Macintosh 5E (Syst 
Expansion) that was an upgrade of the Macintosh Plus 
the AppleWorld conference in March 1987. The SE mod 
targeted the business market. 

The computer had one expansion slot for a plug- 
board, two internal disk drives and a heavy duty pow 
supply with a cooling fan. One of the internal driv 
could be a 20 MB hard disk. A rewritten ROM provided 



speed impr 




(it. 


The Macintc 


s - 


SZ 


had a 


pric 


52, 


769. 
















Macintosh II 


















Appl 


e al: 


so : 


introduced the f 


Iacii 


ltosh 


II at 


AppleWorld 


cor.f 


eret 


ice in Los 


Angeles 


Cal: 


.forni 


Mai 


rch 1987. 


It i 


*as 


a second gen 


erat 


ior 


of the 


Maci 


far 


nily for 


advan 


ced 


users. Mike 


Dhue 


y w; 


is a princip 


the desigr 


1 of 


tr. 


e computer. 


It 


fe 


atured 


an 


art 


:hitectut 


e, a 




.re powerful 


32- 


-bit 


micrt 


■proce 


bu: 


Llt-in hard 


d i = 


:k storage, 


a 


sep 


arate 


colo: 


raoi 


lochrome 


disp: 


_ay 


and network 


capabil 


ities 


that 


enable coi 


inecti 


or. 


to the IBM w 


orld 


Thi 


s re 


prt 


needed t 


he IBM 


announcement 


of 


the 


PS/2 


(Per 


Sy: 


stem/2) ■ 


eries 


of 


computers by 


one 


mon 







Apple Computer ill the 1980"s 10/25 

The computer used a Motorola MC68020 

megabyte of RAM, expandable to 8 MB. The Mac II had 
about four times the speed of a Macintosh SE . The unit 
had an open NuBus architecture developed at MIT. The 13- 
inch color or 12- inch monochrome monitor could display 
640 by 400 pixels as compared to the 512 by 342 pixel 
display on the previous Macintosh computers. The 
compute L !:";( lucied cu.;;:cm sour.d chip? to digitize audio 
input or output. 

The i:-Li:-i-' cci-fiitfi v/i-h :\e :".eg aoyte of ~em:-iy had 
a cost of S3, 898. A 40 MB hard disk drive cost $1, 599 

51,547. A complete system had a total price of $7,044. 
Apple released an implementation of the AT&T UNIX 
operating system called A/UX, for the Macintosh in 1988. 

Otiter Macintosh Developments 

In March 1988, a software project called Pink was 
started to develop a next-generation operating system. 
The new system would incorporate advance features, 
including object-based technology and preemptive 

leader. Another development that became the Blue project 
was started to improve the current operating system. 
This became the System 7 operating system released in 
1991 . 

Apple introduced the Macintosh IIx in September 
1988. It used the Motorola MC68030 microprocessor and 
68882 math coprocessor. The computer had a price of 
57,769. Early in 1989, Apple released the Macintosh 
SE/30 that used the Motorola MC68030 microprocessor. 
Then shortly after, Apple released the powerful modular 
Macintosh Ilex. Apple introduced the Macintosh Ilci in 
September 1989. It was a high-performance version of the 
Mac IIx operating at 25 MHz. The computer had a price of 
56,269. 



10/26 Paitm 1980's-TheroM/Maciutosh era 

Macintosh Portable 

Apple introduced the Macintosh Portable in 

September: 1989. The computer was available in two 
models: a model with a single floppy-disk drive and a 

model with both a floppy-disk drive and an internal 4 

The computer used a Motorola CMOS 68000 
microprocessor with 1 megabyte of RAM expandable to 1 
megabytes. The unit included a built-in 3. 5- inch 1 . 4 
megabyte floppy-disk drive and an active matrix liquid 
crystal display with a screen resolution of 640 by 400 
pixels. 

The computer was 15.25 inches wide by 14.83 inches 



'he keyboard had 63 keys and a unique 
t for locating either a trackball pointing 
an 18-key numeric keypad on the left or right 
of the keyboard. The computer used lead acid 

processor. This provided 8 to 10 hours of